NOVEL NEXT Chapter 64
Some people call a general trading company like this.
They say it’s a modernized East India Company.
Just like the East India Company managed colonies, Japan’s super large general trading companies boldly create economic development zones (de facto colonies) in countries like the Philippines.
Like the European powers during the mercantilism era, they specialize in intermediary trades, selling products produced cheaply in local areas to developed countries or selling advanced technology products from developed countries at high prices to other countries.
They are the embodiment of greed, doing anything that makes money.
“I’ve never heard of this term, but how does this trading company management operate?”
“We leave production to other guilds or regions, and we just sell the goods they make.”
Even though the Toscan Empire is a fantasy empire with a mix of medieval, Renaissance, and modern aspects, the concept of outsourcing production and selling is not entirely absent.
However, most large associations manage their own production and handle their own sales.
That’s the way to maximize profits in this era.
‘While it’s difficult for a guild in a large city like Florence, a merchant could buy up small city guilds and use them like their factories.’
They might let the guild masters and executives elect among themselves, but with massive investments, they can easily bind them in a way that they can’t resist.
Seeing this concept emerge, it seems the life of guilds in this era isn’t long.
Chris nodded along as she listened to me.
“Even if we invested all the capital we have now, we couldn’t make a blacksmith shop or factory that could meet the quantities needed for military supplies within two months. So, I think it’s better to choose to fill the quantities now, even if it means giving up some profits.”
As more middlemen get involved, the profits for sellers inevitably decrease, and consumers have no choice but to pay higher prices.
So, whether buying crops, machines, or any other item, it’s always cheaper to buy directly from the producers.
This rule is a truth that applies in every era.
‘In Korea, sometimes it’s cheaper to buy from big corporations than directly from farmers.’
Simply thinking logically proves this true.
When sharing a pie, if it’s divided among two people, you get a good portion, but among three, it decreases.
“Still, I think it would be better to save up money later to establish facilities that can produce items needed for military supplies and increase profits afterward.”
That’s the typical thought process of merchants in this era.
I don’t disagree with Chris’ statement, but…
Wielding a weapon that only general trading companies can use is currently my best benefit.
“Chris, why are you so fixated on the idea that we need to make a factory?”
Hearing that, Chris tilted her head.
“That’s because managing everything from production to distribution and sales ourselves is the best way to maximize profit.”
“That’s true. But let’s change our way of thinking here.”
I clenched my fist and raised my index finger.
“If we assume the scale of the amount we’re trading is 100, would it be more profitable to increase the profit ratio from 30% to 40%?”
Transport costs are high, and the risks are great, so it’s common for the price of a single pig to rise by 50% when it goes from a rural village to a large city.
Nevertheless, the profit margins are often not as high as expected.
‘Unless you’re selling something like seaweed or steel to a clueless fool, it isn’t easy.’
“Or would it be more profitable to increase the trading amount to 1,000 or 10,000 while keeping the profit ratio at 30%? Which do you think would yield greater profits, Chris?”
“Of course, it would be increasing the scale of the transactions.”
“And right now, we still have plenty of room to stretch out. The military supplies that His Majesty oversees.”
Our empire has a total of 35 divisions.
Out of these, I hold 2, the ones the Pereira fellows used to have were taken by the Emperor, which amounts to about 10, and others were shared by different merchants, around 23.
Given my size, I am like a tuna, while the big merchants are like blue whales, so I can’t poke my nose into their bowls.
If I tried, even if I wouldn’t vanish without a trace, I’d be crushed under unbearable pressure.
‘No, I’ll be saved on the day the Emperor is dying, only to be turned into a slave (noble in legal terms).’
“So you’re thinking of recruiting the guilds to match production levels and supplying from the middle?”
I don’t know what kind of expression I’m making right now, but I couldn’t help but smile.
I’m probably wearing an evil grin, but that doesn’t mean I have any bad intentions.
I want to build a system where everyone is satisfied, and I can reap the biggest benefits.
“Currently, the industry in the Toscan Empire is controlled by guilds. To delve deeper, guilds based in small cities can be skilled and capable but can only operate within those small cities unless they sell through trading companies.”
If you were to describe guilds in a bad light, they are like market bullies led by artisans.
If anyone invades their territory, they call on their lord or noble to bring the intruder to court for execution.
It’s also quite common for those crossing territorial boundaries to end up drowned at riverbeds.
That’s why I wouldn’t even consider fighting the Florence Blacksmith Guild without the backing of Duke Visconti.
“But if I act as a middleman and give them the opportunity to supply large quantities to the military, how grateful would they be?”
“Even small guild artisans wouldn’t want to miss a chance to make money.”
Unless, of course, they are like General Choi Young who treated gold like rocks or the incorruptible icon Admiral Yi Sun-sin at that time.
If they’re shown a way to earn money, almost everyone would be intrigued.
To put it bluntly, the reason humans work hard is to make money, isn’t it?
‘Because you need money to feed your family, buy a house, and prepare for the future.’
“So instead of asking for a lower price in exchange for the opportunity of mass supply, I should politely ask for a slight price reduction.”
One of the main reasons living costs are high in 21st-century Korea is due to middlemen taking excessively large margins.
Wherever you go in the Toscan Empire or across the Albania Continent, half the price of goods is due to guilds, as they hamper the free market price competition between regions and cities.
So we could afford to lower the price we receive by 40% compared to the market price.
“But just because we buy things at a lower price doesn’t mean we can afford to sell at a lower price than other trading companies supplying to the military. Otherwise, groups like the Benaldi Association and other merchants will be unhappy. We should keep the selling price exactly at the current level.”
We’re maintaining the basic formula of making money while not provoking the other merchants. How wonderful.
“I want to save on transportation costs as much as possible, so I think we should persuade guilds starting from the small towns near military bases. What do you think, Chris?”
Chris’s eyes sparkled as she listened to me.
“Lord, you’re truly amazing. While it’s indeed vital to increase profitability, if there’s an opportunity to expand the market, it’s better to expand first. We can make it our trading company’s policy as soon as we finalize the details.”
“Chloe told me to take a break today, so I’m planning to have lunch and rest. Do you think my absence will affect work?”
“The remaining tasks are merely practical adjustments. Convincing the guild masters of the small towns and finding trading partners is all that remains. Aside from meeting with the guild masters, there’s nothing much for you to do directly, so you can take a few days off. The rest will be handled by the butler and administrative staff.”
Chris isn’t someone who makes empty remarks, so I guess it’s okay for me to truly rest now.
“Thank you.”
“You’re welcome, and Lord…”
She hesitated for a moment before speaking.
“Actually, Mr. Antonio from Cafe Medici has released a new menu, and it’s a dish meant for couples. If you have time, would you come with me?”
…I know Antonio has been given the authority to develop new menus, but I never imagined a couple’s menu would be created in our empire.
‘But sales are likely to soar like crazy.’
Young nobles will surely come to enjoy their meals with their favorite concubines, and there will be many who will come repeatedly with their favored maids.
It’ll sell like hotcakes.
“I love the parfait there. Also, aside from you, there aren’t any men I have personal friendships with.”
There’s no reason not to go along.
“I’ll join you once I finish the discussions with the guild masters and once things are organized.”
At those words, a smile blossomed on Chris’s face.
“Yes, Lord.”
Then I promised Chloe that we would continue to rest together this afternoon and tomorrow, heading to my room.
Chloe looked at me and spoke in a slightly pouting voice.
“It seems Chris is now openly trying to catch your eye. But remember, I’m the one who has the most affection from you.”
“Today, no, tomorrow, I cleared my schedule entirely. I’ll shower you with love until you’re tired of it.”
Chloe isn’t a virgin anymore, but upon hearing my words, she shyly lowered her head.
With her face flushed like a ripe apple, she whispered softly.
“Please love me as much as you desire…”
After taking a break, I weighed myself and found I had lost 1 kg.
In that state, I took a carriage towards the city that would become the production outsourcing base.